New Economics Papers
on Collective Decision-Making
Issue of 2011‒01‒03
eleven papers chosen by

  1. Do voters vote in line with their policy preferences? The role of information By Nordin, Mattias
  2. The Right Look: Conservative Politicians Look Better and Their Voters Reward It By Berggren, Niclas; Jordahl, Henrik; Poutvaara, Panu
  3. Strategic Spending in Voting Competitions with Social Networks By Carlos Lever Guzmán
  4. Bargaining in Legislatures: A New Donation Paradox By Maria Montero
  5. One Share-One Vote: New Empirical Evidence By Eklund, Johan E.; Poulsen, Thomas
  6. Endogenous growth in a model with heterogeneous agents and voting on public goods By Borissov, Kirill; Surkov, Alexander
  7. Common and private property to exhaustible resources: theoretical implications for economic growth By Borissov, Kirill; Surkov, Alexander
  8. “The scale we use, the world we see”: A contextual analyses of ethnocentric attitudes and extreme right voting in Belgium By Quentin David; Jean-Benoit Pilet; Gilles Van Hamme
  9. Democracy and Trade Policy: the Role of Interest Groups By Kyounghee Lee
  10. The Market for Policy Communication By Johan F.M. Swinnen; Thijs Vandemoortele; Mara Squicciarini
  11. Cronyism By Pedro S. Martins

  1. By: Nordin, Mattias (Uppsala Center for Fiscal Studies)
    Abstract: This paper investigates how information aects voting behavior. Speci cally, I test (i) if more informed voters are better at voting for their most preferred politicians and (ii) if this translates into a bias on the aggregate level. To do so, I use a set of Swedish individual survey data on the preferences for public spending of both politicians and voters, which provides an opportunity to investigate how information affects voters' ability to match their preferences with those of the politicians. The results support both hypotheses: more informed voters are more likely to vote for their most preferred politicians, and on the aggregate level, I find that the left-wing parties would have received 1 to 3 percentage points fewer votes if all voters had been fully informed.
    Keywords: Voting behavior; Information; Vote aggregation
    JEL: D70 D80 H71
    Date: 2010–12–21
  2. By: Berggren, Niclas (The Ratio Institute); Jordahl, Henrik (Research Institute of Industrial Economics (IFN)); Poutvaara, Panu (University of Munich)
    Abstract: Previous research has established that good-looking political candidates win more votes. We extend this line of research by examining differences between parties on the left and on the right of the political spectrum. Our study combines data on personal votes in real elections with a web survey in which 2,513 non-Finnish respondents evaluated the facial appearance of 1,357 Finnish political candidates. We find that political candidates on the right are better looking in both municipal and parliamentary elections and also have a larger beauty premium in municipal, but not in parliamentary, elections. We discuss possible explanations for these patterns, based on the fact that municipal candidates are relatively unknown.
    Keywords: Beauty; Elections; Political candidates; Appearance; Ideology; Parties
    JEL: D72 J45 J70
    Date: 2010–12–20
  3. By: Carlos Lever Guzmán
    Abstract: This paper proposes a model of voting competitions (political campaigns and strategic lobbying) where voters are influenced by the opinion of their neighbors on a social network. In the unique pure strategy nash equilibrium, resources are targeted toward individuals with an influential position in the network. This finding contrasts with previous theories of strategic spending which predict that parties (or lobbies) should spend more on individuals who have a higher probability of being pivotal for the vote. The paper then tests the model using data on campaign contributions by interests groups in the US. House of Representatives. The estimations show that both network influence and pivotality are significant predictors of campaign contributions.
    Keywords: Network games, strategic spending, Colonel Blotto games, counteractive lobbying, Bonacich centrality
    JEL: D85 D72
    Date: 2010–12
  4. By: Maria Montero (School of Economics, University of Nottingham)
    Abstract: It is well known that proposers have an advantage in the canonical model of bargaining in legislatures: proposers are sure of being part of the coalition that forms, and, conditional on being in a coalition, a player receives more as a proposer than as a coalition partner. In this paper I show that, if parties di¤er in voting weight, it is possible for a party to donate part of its proposing probability to another party and be better-o¤ as a result. This can happen even if the recipient never includes the donor in its proposals. Even though actually being the proposer is valuable, having a higher probability of being proposer may be harmful.
    Keywords: legislative bargaining, weighted majority games, voting paradoxes
    JEL: C78 D72
    Date: 2010–11
  5. By: Eklund, Johan E. (The Ratio Institute and Jönköping International Business School); Poulsen, Thomas (Copenhagen Business School)
    Abstract: Shares with more voting rights than cash flow rights provide their owners with a disproportional influence that is often found to destroy the value of outside equity. This is taken as evidence of discretionary use of power. However, concentration of power does not necessarily result from control enhancing mechanisms; it could also be that some shareholders retain a large block in a one share-one vote structure. In this paper, we develop a methodology to disentangle disproportionality, which allows us to test the effect of deviations from one share-one vote more precisely. Our empirical findings add to the existing literature.
    Keywords: Ownership structure; one share-one vote; proportionality; performance; entrenchment
    JEL: G32 G34
    Date: 2010–12–17
  6. By: Borissov, Kirill; Surkov, Alexander
    Abstract: We consider a Barro-type endogenous growth model in which the government’s purchases of goods and services enter into the production function. The provision of government services is financed by flat-rate (linear) income or lump-sum taxes. It is assumed that individuals differing in their discount factors vote on the tax rates. We propose a concept of voting equilibrium leading to some versions of the median voter theorem for steady-state equilibria, fully characterize steady-state equilibria and show that if the median voter discount factor is sufficiently low, the long-run rate of growth in the case of flat-rate income taxation is higher than that in the case of lump-sum taxation.
    Keywords: economic growth; voting; proportional; flat-rate; linear tax; lump-sum tax; heterogeneous agents; endogenous growth
    JEL: E62 H21 H31 H41 D91 D72 O4
    Date: 2010
  7. By: Borissov, Kirill; Surkov, Alexander
    Abstract: We develop two models of economic growth with exhaustible natural resources and consumers heterogeneous in time preferences. The first model assumes private ownership of natural resources. In the second model, natural resources are commonly owned and the resource extraction rate is chosen by voting. We show that if discount factors are given exogenously, the long-run rate of growth under private property is higher than or equal to that under common property. If the discount factors are formed endogenously, under some circumstances common property can result in a higher rate of growth than private property.
    Keywords: natural resources; economic growth; voting; private property; common property
    JEL: Q32 D91 O13 D72 O4
    Date: 2010
  8. By: Quentin David (CREA, Université du Luxembourg); Jean-Benoit Pilet (CEVIPOL, Université Libre de Bruxelles); Gilles Van Hamme (IGEAT, Université Libre de Bruxelles)
    Abstract: Contextual analyses have received increasing interest as a way to understand electoral behaviors during the last decade. However, the growing interest in contextual analysis among political scientists is now limited by conceptual and methodological difficulties related to scale. Indeed, we show here that the scale we use might significantly change the results we get. Our central claim is therefore to plead in favor of a more careful reflection on scale in contextual analysis. This reflection on the impact of scale is made by applying two different methods to explain extreme right voting and ethnocentric attitudes. In the first, we define the context in which individuals are embedded through circles around their home while in the second, we try to capture the real environment of individuals by defining their proximity area, living pool, and employment pool. When applying contextual variables (share of migrants and economic context) to explain extreme right voting and ethnocentric attitudes, the intermediate scale – defined here as the municipality or radius of 4 to 8 km around one’s residence – appears to be the most influential in both approaches compared either to closer neighborhood or larger levels. Our analysis also shows an interesting differential for the effect of contextual variables on ethnocentric attitudes and on extreme right voting, especially concerning the impact of urban versus rural context.
    Keywords: Elections, Belgium, Voters
    JEL: D72
    Date: 2010
  9. By: Kyounghee Lee (Korea Institute for International Economic Policy)
    Abstract: As democracy develops and matures, the number of interest groups attempting to voice their interests with respect to trade policies tends to increase, and sometimes governments collide with them in the process of enacting restraints. This paper aims to investigate empirically the role of interest groups in Korea's trade policy, utilizing the Grossman and Helpman (1994). Contrary to prevailing wisdom, the results of our empirical investigation suggest that a greater level of participation by diverse interest groups actually promotes trade liberalization, as different groups offset each other's demands in the act of obtaining government protection. The findings imply that "openness and pluralism" with respect to interest groups is necessary if better strategies for trade liberalization are to be developed.
    Keywords: trade policy, interest groups, democracy, political economy, Korea
    JEL: F13 F59
    Date: 2010
  10. By: Johan F.M. Swinnen; Thijs Vandemoortele; Mara Squicciarini
    Abstract: We develop a model of policy communication by aid agencies, NGOs and intergovernmental organizations and we show how the need for fundraising affects the policy communication strategy of these organizations. To attract more funds, organizations may bias their communication. The bias depends on the ex ante beliefs of donors and on mass media reporting.
    Keywords: political economy, bias, NGOs,intergovernmental organizations, fundraising
    JEL: D83 D23 P16 L31
    Date: 2010
  11. By: Pedro S. Martins
    Abstract: Politicians can use the public sector to give jobs to cronies, at the expense of the efficiency of those organisations and general welfare. Motivated by a simple model of cronyism that predicts spikes in appointments to state-owned firms near elections, we regress 1980-2008 monthly hirings across all state-owned Portuguese firms on the country's political cycle. In most specifications, we also consider private-sector firms as a control group. Consistent with the model, we find that public-sector appointments increase significantly over the months just before a new government takes office. Hirings also increase considerably just after elections but only if the new government is of a different political colour than its predecessor. These results also hold when conducting the analysis separately at different industries and most job levels, including less skilled positions. We find our evidence to be consistent with cronyism and politically-induced misallocation of public resources.
    Keywords: Corruption, matched employer-employee panel data, public-sector employment
    JEL: J45 H11 J23
    Date: 2010–12

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